Healthy Americas Foundation Report Too Many Drugs Tested on Patients Who Are Not the Ones Who Will Take Them

A Healthy Americas Foundation review of all 46 novel FDA drug approvals in 2025, covering roughly 26,000 pivotal-trial participants, found significant gaps between trial enrollment and the patient populations affected by the diseases. Only about one in five participants in cancer and cardiovascular, blood, kidney and endocrine trials were enrolled in the U.S.; Black and Hispanic participation often lagged disease burden, while adults aged 65+ represented only about one-quarter to one-third of cancer and cardiovascular participants. The report calls for disease-burden-based enrollment targets, minimum subgroup counts, separate U.S. reporting and reimbursement of participation costs, raising potential regulatory and clinical-development risks for drugmakers.

Analysis

This is not yet a fundamental earnings event, but it raises the probability that FDA diversity-action-plan enforcement and post-marketing evidence requirements become more consequential in 2027 trial starts. The economic exposure is greatest for sponsors relying on small pivotal datasets, accelerated approval, or ex-US enrollment to compress development timelines; a required expansion of U.S. sites and subgroup enrollment would increase per-patient costs, extend recruitment, and reduce NPV for marginal pipeline assets. Large-cap pharma can absorb this, whereas cash-burning small/mid-cap biotech faces greater dilution risk if pivotal programs require protocol amendments or supplemental studies.

CROs with dense U.S. site networks and decentralized-trial capabilities—IQV, MEDP and ICON—are the likely second-order beneficiaries if sponsors shift trial mix toward domestic recruitment, patient-navigation, and retention services. The offset is that longer enrollment periods can delay milestone revenue recognition and reduce biotech clients' ability to fund programs, making the net CRO effect more favorable for diversified IQV/MEDP than for smaller site-dependent vendors. Over 6-18 months, better representative datasets could modestly improve payer confidence and label breadth for successful drugs, favoring commercial-stage franchises over binary clinical developers.

Consensus should resist treating an advocacy report as an imminent regulatory shock: there is no disclosed enforcement action, sponsor-specific deficiency, or binding rule change. The actionable catalyst is an FDA guidance update, Congressional action, or a visible complete-response letter citing generalizability; absent one, broad biotech multiple impact should be negligible over the next 1-3 months. Falsify the CRO-beneficiary thesis if FDA implementation remains voluntary or if U.S. enrollment shares do not rise in 2027 trial disclosures.

Key Decisions for Investors

• No directional XBI or IBB trade on this report alone; maintain an alert for FDA guidance, enforcement language, or trial-plan disclosure changes over the next 3-6 months before pricing a sector-wide development-cost increase.
• For a 6-18 month thematic expression, consider a modest long IQV / short XBI pair: IQV has diversified service revenue and should capture higher-complexity trial spend, while XBI carries the highest financing sensitivity to longer, costlier pivotal studies. Reassess if biotech financing reopens materially or IQV guides to weaker biotech bookings.
• Screen clinical-stage holdings for pivotal programs with predominantly ex-U.S. enrollment, elderly-disease indications, narrow safety databases, or accelerated-approval dependence; reduce exposure where cash runway cannot fund a 6-12 month enrollment extension or a post-marketing confirmatory study.
• Favor established pharma with broad commercial infrastructure over pre-revenue biotech if the policy narrative gains traction; any incremental trial cost is unlikely to impair earnings for LLY, JNJ, or MRK, while better subgroup evidence can reduce reimbursement and liability uncertainty.